Sushant Bhansali, the CEO of Ambit Asset Management believes that the market volatility will persist over the near term, given the concerns like food inflation, US bond yields, and global geopolitics.
But, "rather than getting caught in the cycle of trying to time the market, investors should focus on building a correct, quality-oriented long-term investment portfolio," he advises.
Ambit remains bullish on autos, pharmaceuticals, chemicals, and banks and believes that the IT services growth profile has bottomed out, says Sushant with more than 19 years of experience in the asset management and investment business.
Do you think the market will complete the 10 percent correction from its record high, in the near term?
Market volatility is expected to continue in the near term, but predicting the absolute bottom and peaks will always be difficult. Key concerns include food inflation, US bond yields, and global geopolitics, but there are also pockets of undervalued assets and strong earnings growth.
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Therefore, there are forces that are creating a push and pull-effect on the markets. Rather than getting caught in the cycle of trying to time the market, investors should focus on building a correct, quality-oriented long-term investment portfolio.
Is it the time to start betting on largecaps over midcaps and smallcaps?
Despite the strong rally witnessed in the last few months, we still believe that there are a few pockets of value that remain in the market. It is important to note that mid and small-cap businesses are also included in these pockets of value.
During these volatile times, it is easy for investors to make the mistake of investing in non-quality businesses, which can lead to a shift in focus from long-term wealth creation to short-term gains.
To create long-term wealth, it is crucial to identify businesses that have a balanced risk-reward ratio, coupled with a steady growth profile. Instead of focusing on market capitalisation, investors should conduct bottom-up analysis to find quality businesses that are available at bargain prices.
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Q: Also is it the time to be cautious while putting new money in the midcaps and smallcaps?
Again, the answer would lie in bottom-up analysis. Several sectors still seem to have a strong growth profile coupled with attractive valuations at this juncture - banks, chemicals, etc. are just some of the examples that come to mind.
Q: Several sectors seem to be looking attractive in the current correction. Where do you want to bet your money?
We continue to remain bullish on autos, pharmaceuticals, chemicals, and banks and believe that IT services growth profile has bottomed out.
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Q: Are you worried due to geopolitical issues and possible US slowdown?
Yes, these issues can create a short-term hiccup in the market but the fundamentals of the Indian economy remain on a strong footing, and equity markets remain fairly attractive from a long-term perspective. Hence, we would use any meaningful correction as an opportunity to build long-term positions.
Q: In the current correction, are you adding positions in the banking & financials space?
Yes, selectively in stocks where we feel that the risk-reward is attractively priced.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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